Exam (elaborations)
Colorado Health Insurance Exam
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Colorado Health Insurance Exam
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Colorado Health Insurance ExamIndemnity - ANSWER Monthly amount paid to individual to make up for lost
earnings due to insured's inability to work
Elimination (Waiting) Period - ANSWER Time period insured must be disabled
before benefits begin, not paid retroactively
- 30, 60, 90, 180 days
Benefit Period - ANSWER Benefits paid during disability period or until end of
specified period of time
-Typically 1 year, 2 years, 5 years, and to age 65
Waiver of Premium - ANSWER Waives premium payments during disability after
initial waiting period, retroactively effective to beginning of waiting period and
premiums paid during that time will be refunded once benefits begin
Additional Monthly Benefit (AMB) Rider - ANSWER Pays an additional benefit
amount with regular monthly benefit for limited period of time (usually 6 or 12
months), paid even if insured receives government benefits
-Work comp, other government programs
Social Insurance Supplement (SIS) Rider - ANSWER Pays in addition to regular
disability policies until Workers' Compensation or Social Security payments begin,
pays only during policy period, makes up for gaps left by government programs
Non-Occupational Coverage - ANSWER Covers disabilities that result from non-
job-related illnesses or injuries
Occupational Coverage - ANSWER Covers both job-related and non-job related
disabilities
Partial Disability - ANSWER Pays 50% of total benefit, person returns to work in a
reduced capacity, usually no longer that 3-6 months
Residual Disability Benefits - ANSWER Based on amount of income lost due to
disability, if less than stated income reduction then no benefits will be paid
Recurrent Disability - ANSWER Protects employee who returns to work but
becomes disabled again due to same related cause, must occur within certain time
frame after returning to work, no waiting to receive benefits again
Cost-Of-Living-Adjustment (COLA) Rider - ANSWER Benefit amount can increase
while receiving disability based on Consumer Price Index, adjusted usually every 12
months
, Future Increase Option (FIO) Rider - ANSWER Allows insured to increase policy
benefits without having to provide evidence of insurability, income must have
increased
Relation of Earning to Insurance Provision - ANSWER Insurer can reduce benefit
paid to disabled insured if their income is less than when they bought policy, based
on average income over 24 month period
Accidental Death and Dismemberment (AD&D) Rider - ANSWER Pays principal
sum (full benefit) if insured dies accidentally or loses two limbs or sight in both eyes,
capital sum (half benefit) is paid if insured loses one limb or sight in one eye
Rehabilitation Benefit - ANSWER Pays for vocational training to prepare for new
occupation when totally disabled and can no longer return to normal job, continues
while insured is disabled and stays in program
Medical Reimbursement - ANSWER Reimburses insured for medical expenses to
treat non-disabling injury
Return of Premium Rider - ANSWER Refunds stated percentage of premium after
stated period of time, and at age 65 or date of death, benefits paid are subtracted
from payment
Exclusions - ANSWER War or military service, suicide/self inflicted injuries, non-
commercial aviation, commission of a felony, living overseas
Group Disability Policy - ANSWER Less expensive than individual policy, usually
percentage of pay instead of stated benefit
-Short Term Disability (STD) - 6-24 months, 60-70% of income
-Long Term Disability (LTD) - 2 years to age 65
Key Person Diability - ANSWER Pays monthly benefit to business to cover
expenses for additional help/outside services when essential person is disabled
Business Overhead Expense (BOE) Policy - ANSWER Covers certain overhead
expenses that continue when business owner disabled (rent, taxes, insurance
premiums, utility bills, employees' compensation)
Disability Buy-Sell Insurance - ANSWER Will provide funds needed to execute an
agreement to buy out the interest of a business owner/partner who becomes
disabled and can no longer contribute to business
Social Security Disability Benefits - ANSWER Not designed to replace total
earnings, primary insurance amount (PIA) calculated using percentage of income
over working years
- Fully insured = 10 years or 40 credits
- 5 month waiting period
- Disability must last 12 months
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